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International HRM insights for navigating the COVID-19 pandemic: Implications for future research and practice

Abstract

We show the relevance of extant international business (IB) research, and more specifically work on international human resources management (IHRM), to address COVID-19 pandemic challenges. Decision-makers in multinational enterprises have undertaken various types of actions to alleviate the impacts of the pandemic. In most cases these actions relate in some way to managing distance and to rethinking boundaries, whether at the macro- or firm-levels. Managing distance and rethinking boundaries have been the primary focus of much IB research since the IB field was established as a legitimate area of academic inquiry. The pandemic has led to increased cross-border distance problems (e.g., as the result of travel bans and reduced international mobility), and often also to new intra-firm distancing challenges imposed upon previously co-located employees. Prior IHRM research has highlighted the difficulties presented by distance, in terms of employee selection, training, support, health and safety, as well as leadership and virtual collaboration. Much of this thinking is applicable to solve pandemic-related distance challenges. The present, extreme cases of requisite physical distancing need not imply equivalent increases in psychological distance, and also offer firms some insight into the unanticipated benefits of a virtual workforce – a type of workforce that, quite possibly, will influence the ‘new normal’ of the post-COVID world. Extant IHRM research does offer actionable insight for today, but outstanding knowledge gaps remain. Looking ahead, we offer three domains for future IHRM research: managing under uncertainty, facilitating international and even global work, and redefining organizational performance.

Introduction

COVID-19 altered every person’s reality overnight. Individuals, cities, economies, countries, and continents have experienced the shock of lockdown and the fear of unknowing. Managers have had to make many decisions in a very short period of time – decisions about who should stay at work and who should go home; how and where people could be moved into digital space; and what the priorities are and how those priorities can best be communicated to employees. In 2019, Ernst & Young surveyed 500 board members and chief executive officers (CEOs) globally and found that only 20% of the executives surveyed believed their companies were prepared to respond to a large adverse risk (EY, 2020). A few short months later, the COVID-19 pandemic crisis arrived and proved that their concerns were well founded. Concerns related to global supply chain vulnerabilities and financial resilience have come to the fore during the COVID-19 pandemic, along with significant strategic human talent concerns. BCG has called the ongoing COVID-19 pandemic a “people-based crisis.” We agree.

The Economist noted that just as the financial crisis in 2007–2009 highlighted the role of talented Chief Financial Officers (CFOs), the COVID-19 pandemic is highlighting the role of Chief Human Resource Officers (CHROs). They wrote:

“When the financial crisis rocked the business world in 2007–2009, boardrooms turned to corporate finance chiefs. A good CFO could save a company; a bad one might bury it. The COVID-19 pandemic presents a different challenge – and highlights the role of another corporate function, often unfairly dismissed as soft. Never before have more firms needed a hard-headed HR boss.

The duties of chief people officers, as human-resources heads are sometimes called, look critical right now. They must keep employees healthy; maintain their morale; oversee a vast remote-working experiment; and, as firms retrench, consider whether, when and how to lay workers off. Their in-trays are bulging.” (The Economist, March 24th, 2020).

The COVID-19 pandemic has pushed a massive number of employees, who were already facing stress from the health risk itself, to working from home. Compounding this stressor, many managers are now leading remote teams for the first time. This sudden change has exacerbated the challenges of collaborating and leading from a distance, challenges we in the field of international business (IB) understand well, but that have remained largely unaddressed in management practice. In 2018, RW3 surveyed 1620 employees from 90 countries regarding their experiences working on ‘global virtual teams’ in multinational enterprises (MNEs). While most of the respondents identified their work on global virtual teams as important for job success, only 22% received training on how best to work in their geographically distributed teams, 90% of which had two or more cultures represented. The picture is not much better at the leadership level. Among the virtual team leaders, only 15% described themselves as “very effective” with less than 20% receiving training on how to lead from a distance (RW3, 2018).

The field of IB has long accounted for the challenges associated with significant global threats and issues concerning geographical distance. From the lens of IB generally, and international human resource management (IHRM) specifically, we can recast the issues emerging from the current COVID-19 pandemic in terms of the existing academic knowledge base. By holding up this theoretical mirror, we can more clearly see the issues and offer insights to MNE managers facing challenges in leading their people through this crisis. In this Editorial, we will distil the knowledge and experience IB scholars, and more specifically IHRM, have accumulated over recent decades to offer some key learnings on managing people from a distance. Our accumulated body of knowledge in IHRM has helped us understand the challenges people face when placed in a wide range of MNE work arrangements, such as expatriate assignments, virtual international work, global project teams, and frequent international travel (Shaffer, Kraimer, Chen & Bolino, 2012). This academic knowledge is particularly useful for human resource managers today, as they face new challenges and difficult decisions during this pandemic.

The purpose of this Editorial is not to conduct a comprehensive review of the literature; rather, the goal is to select a few key themes and opportunities for ‘quick wins’ that could be immediately applied in MNE managerial practice. At the end of this Editorial, we go back to the academic literature and offer suggestions for future research in IHRM. These suggestions represent the topics where practice would be better served from a deeper knowledge base. Thus, our suggestions for future research in IHRM relate to the broader gaps in the IB literature that, if filled, could help answering the next ‘big questions’ in IB (Buckley, Doh, & Benischke, 2017).

Handling the COVID-19 crisis

Insights from IHRM’s Selection, Training, and Employee Support Literature

The field of IHRM has long understood that when employees are in novel or uncertain contexts, they experience stress (Anderzén & Arnetz, 1997; Richards, 1996; Stahl & Caligiuri, 2005). To respond to such stress, employees leverage their dispositional traits and coping responses (Shaffer, Harrison, Gregersen, Black, & Ferzandi, 2006; Stahl & Caligiuri, 2005). Stress affects employees’ ability to empathize with others, consider plausible alternatives, remain open-minded, engage in cognitively challenging tasks, and expand one’s experiences to learn and grow. As the literature suggests, when individuals encounter periods of stress and anxiety, they have a tendency to seek out and find comfort in the familiar, the people, places, and even food that are the most predictable; this is the reason there are expatriate communities, demographic faultlines, and comfort food in every culture around the world.

The COVID-19 pandemic has produced tremendous novelty and uncertainty which is affecting the mental health of many people around the world (World Health Organization, 2020). Even as the health risks of the pandemic begin to wane in some countries and the probability of a vaccine appears high, the novel ways of working remotely and the fears around the global recession will continue to produce a state of uncertainty. In their stress-induced, cognitively reduced state, employees will have a particularly difficult time working effectively in different countries and with people from different cultures, especially in instances of high unfamiliarity. There is not enough bandwidth, so to speak, for even greater novelty and more uncertainty. Based on knowledge from the IHRM literature, a number of selection, training, and support practices can positively mitigate the concerns at hand.

Selection

IHRM has taught us that some people are naturally better than others at managing stress and uncertainty, enabling them to make better decisions and work more effectively across countries and cultures (Shaffer et al., 2006). Employees with a higher tolerance of ambiguity are less likely to experience the negative effects of stress caused by working in a context with greater uncertainty (Frone, 1990). Employees with resilience not only bounce back after stressful situations but also find positive meaning from them (Tugade & Fredrickson, 2004). Likewise, employees with natural curiosity can adapt better to novel situations, thrive in situations of anxiety and uncertainty, and be more creative and open-minded (Hagtvedt, Dossinger, Harrison, & Huang, 2019; Kashdan, Sherman, Yarbro, & Funder, 2013).

During this period of global stress and uncertainty, organizations (and especially MNEs) should select for these three critical, cultural agility competencies: tolerance for ambiguity, resilience, and curiosity for all employees working multiculturally. Employees working, even virtually, with clients, vendors, or colleagues from different cultures will now, more than ever, need these competencies to be effective. Selection is key. Companies can also use this time to better assess their bench strength for culturally agile talent in order to understand who will be most effective in situations of growing novelty and uncertainty.

Training

Research suggests that a state of anxiety fosters a natural desire for affiliation (Sarnoff & Zimbardo, 1961; Schachter, 1959), especially amongst those who are living the same anxiety-inducing experience (Gump & Kulik, 1997; Schachter, 1959). For global teams in MNEs that have existing familiarity, the COVID-19 pandemic offers an ideal time to foster cross-cultural team cohesion and to validate expectations of reliability since the health-related stress is present everywhere in the world. Training to support relationship formation would be well-received at this time when every team member, irrespective of country, is experiencing a similar stressor. The shared stress, anxiety, and frustrations can create ties that further bind already collegial global teams. This shared experience has the potential to enhance cohesion going forward.

For the many team members who have not yet received cross-cultural training on relationship formation across borders, any lessons learned through training, (if offered today) would land on fertile soil, because team members already have a shared “enemy” in COVID-19. This cross-cultural training in MNEs would help reduce ambiguity for cross-cultural differences by offering skill-building on how to collaborate across cultures; how to actively seek similarities with colleagues from different cultures; how to use technology inclusively; how to set team-level ground rules for communication and work-flow, and the like. This training could also help colleagues from different cultures become mindful of situations where they might be rushing to judgement because of their “reduced bandwidth” state. It could also teach them how to add respectful questioning into cross-cultural work groups to thwart the negative aspects of stereotypes.

Just as the shared stressful experience among colleagues can facilitate their emotional bonding, there are other HRM practices that would land well if offered in this current COVID-19 climate. For example, employees’ need for professional growth is likely to strengthen many employees’ desire to receive additional training. The psychology literature offers substantial evidence that one of our fundamental human motivators is the need for competence (Deci, Olafsen, & Ryan, 2017). During the COVID-19 pandemic, the lack of professional stimulation while working from home is fostering more self-directed knowledge-seeking to satisfy the need to learn, grow, and demonstrate competence. For example, LinkedIn Learning courses have seen a threefold increase in usage since the start of stay-at-home orders (Forbes, 2020). With a growing interest in self-directed learning, companies should actively harness this time to invest in the skill development of employees. At a time when employees’ desire to learn, grow, and demonstrate competence is heightened, companies that offer access to, or reimburse, employees’ online training achieve a clear win–win; they increase talent capability and, concurrently, foster employee motivation.

Support

In IHRM, we understand how an individual’s comfort or fit within a given environment can affect their success, and also that organizational support can positively affect adjustment in a novel environment (Takeuchi, Wang, Marinova, & Yao, 2009). Those who work on global cross-national teams in MNEs face health risks due to requirements to operate across time zones, with flexible schedules, and expectations of availability around the clock (Lirio, 2017). In the ambiguity of both global work and current COVID-19 pandemic, the issues for which support is needed will vary depending on the person’s work-life issues, but organizational support remains critical (Kraimer, Wayne, & Jaworski, 2001; Shaffer, Harrison, & Gilley, 1999). Companies should offer support practices to help mitigate stress such as webinars on resilience, tutorials on mindfulness (De Cieri, Shea, Cooper, and Oldenburg, 2019), employee assistance programs, and virtual counseling services. These stress-mitigating offerings would be particularly helpful for employees who engage in virtual work at the international level, as they face additional stress.

The world is experiencing a collective state of stress, but the global economy will not pause for employees requiring time to be ready to come out of their comfort zone to work again in different countries and with people from different cultures. More than ever, human resources managers in MNEs need to foster cohesion during this time of uncertainty by using the above selection, training, and support practices.

Insights from IHRM’s Management of Health and Safety

The COVID-19 pandemic has brought health and safety issues to center stage and has placed a spotlight on the role of the HRM function in managing the health and safety of the international workforce. While management researchers already know well that employees’ health and safety are linked to the demands (such as a heavy workload) and resources (such as a supportive manager) at work, the international HRM field offers specific learnings about managing health and safety for a spatially dispersed and mobile workforce. In IHRM, we understand the challenges of protecting employees, and their families, from injury and illness across national boundaries and in different work arrangements (Gannon & Paraskevas, 2019; Shaffer et al., 2012). Research in IHRM, alongside scholarship in fields such as health and psychology, has shown that globally mobile employees face specific job demands that can affect their health and safety (Anderzén & Arnetz, 1997; Druckman, Harber, Liu, & Quigley, 2014). Frequent travel, high workloads, long work hours, and job pressure lead to negative health consequences (Bader, 2015) and also negatively affect psychological well-being and family relationships (Jensen & Knudsen, 2017). We also know, however, that globally mobile work can be stimulating and rewarding in many positive ways (Ren, Yunlu, Shaffer, & Fodchuck, 2015).

During the pandemic, life has changed a lot for many who were international business travelers and globally mobile employees in MNEs; their current “grounding” may mean they are experiencing a sense of loss. Their frequent travel, hotel accommodation, and business dinners have been replaced by stay-at-home restrictions and virtual meetings. The stress caused by the demands of virtual global work is real; many employees are experiencing long work hours to accommodate time zones and performance challenges in less than ideal remote working conditions. These tangible work challenges all occur with the backdrop of job insecurity and future economic uncertainty. The changed work conditions during the pandemic present new challenges for employees’ health and safety.

Communication and support for health and safety

IHRM activities such as international family relocations provide a knowledge base that is of particular value in the pandemic because IHRM is more likely than other functional areas in the MNE or domestic HRM to deal with the interface between employees’ professional and private lives (Mayerhofer, Müller, & Schmidt, 2010). We know that understanding work-related demands and resources is important for all managers, and particularly for HR professionals, to support and maintain employees’ health and safety. Clear and consistent communication from managers and HR about health risks and available health resources is important. Research on managing expatriate assignments in MNEs shows that communication and support from managers is an important buffer against job stress experienced by employees (Kraimer, Bolino, & Mead, 2016; Stroppa & Spiess, 2011). This knowledge can be applied to the pandemic situation of working from home. For some people, social isolation as well as uncertainty about their health, job, and future will have a negative impact on their mental health. Any stigma linked to mental health might prevent some employees from seeking help, and MNE senior managers should therefore communicate with empathy, encourage wellness resources, and offer practical support for employees’ health and safety.

Flexible work arrangements

Many managers will be familiar with flexible work arrangements (FWAs) that formalize where, when, and how employees do their work (Chen & Fulmer, 2018). FWAs, such as flexible scheduling of work and working from home, have been shown to deliver positive benefits for employees’ health (e.g., Anderson, Kaplan & Vega, 2015). IHRM has unique insights into FWAs; for example, people working in global teams are accustomed to working from home and outside standard business hours. IHRM research has highlighted the importance of practices such as FWAs that help MNE employees to maintain their health and wellbeing to cope with the demands of working across geographical and temporal boundaries (Adamovic, 2018).

In response to the COVID-19 pandemic, many MNEs have been forced to rely on one type of FWA: employees working from home. This is a new challenge for many, including IHRM scholars and practitioners. A survey conducted with 800 global HR executives in March 2020 found that 88% of organizations had either encouraged or required employees to work from home during the COVID-19 crisis (Gartner, 2020). Because this shift has been involuntary, continues over a lengthy period, and requires entire households to be house-bound, there is more potential for employees to experience increased work hours, as well as increased work-life conflict. For employees who were globally mobile, and now find themselves working from home during the pandemic, the shift is particularly significant and borders between work and family may require re-negotiation and re-organization.

There are several specific ways by which managers and HR can help their employees to work from home in a safe and healthy manner. There are many simple and cost-effective ways to encourage healthy lifestyle habits. For example, encouraging healthy work practices such as working within regular hours and taking regular work-breaks will help employees to switch off from work (Adamovic, 2018; Chen & Fulmer, 2018). Communicating clearly and managing work expectations will help employees to maintain their family responsibilities. The pandemic offers an opportunity for managers to explore how to implement flexible work arrangements that can enhance the health and safety of employees well into the future, particularly that of globally mobile employees.

Over a decade ago, Collings, Scullion and Morley (2007) identified health and safety as an important area of IHRM practice and pointed out the implications of employee ill-health for organizational performance as well as for the employee and their family. Applying the insights from IHRM to the pandemic situation, managers should give priority to protecting and managing employee health and safety now and in the future. Overall, our goal for employees is not only to protect and manage their health and safety but to enhance positive outcomes such as thriving and engagement with their work.

Insights from International Leadership in MNEs

During this pandemic, leaders in MNEs have needed to make swift decisions with far-reaching consequences, communicate effectively to diverse stakeholders, manage resources judiciously, integrate organizational and local demands, and inspire expectations of reliability via authenticity. The competencies needed for leadership during the COVID-19 pandemic in general are mirroring the competencies of effective leaders in MNEs because the uncertainty, ambiguity, and importance of context are present in both leadership situations.

Those MNE leaders who succeed in situations of novelty typically command three cultural-agility related responses that they can leverage like tools in a toolbox (Caligiuri, 2012; Caligiuri & Tarique, 2016). First, they have the skills to adapt to the demands of the context when needed, relying on those familiar with the local context to influence key decisions. Second, they know how to integrate diverse perspectives and demands; even when the demands are conflicting, they can work to find an integrated solution. Third, they know when to provide direction, even if it is not welcome or popular. A leader’s ability to read the demands of the situation and respond, as needed, using the appropriate response out of the three alternatives above, are proving to be especially relevant during the pandemic.

Adaptation

Whether leaders in MNEs adapt to the demands of a situation by wearing a face mask in public during the COVID-19 pandemic, or follow to the tee other local public health recommendations affecting organizational functioning, they are acknowledging that they understand, appreciate, and are willing to abide by the norms of the situation. In some situations (but not all) adapting to the norms of the context will enable leaders to persuade, instill confidence, and influence those whose value system fosters certain behavioral expectations.

Integration

In some circumstances, adaptation is the wrong approach and MNE leaders need to integrate multiple, sometimes conflicting, perspectives to create a course of action. Leaders in MNEs do this when they integrate the cultures represented on their geographically distributed teams. During the COVID-19 crisis we are observing highly effective leaders use the same approach, balancing health demands to protect employees with urgent, firm-level requirements for economic performance.

Direction

In other situations, neither adaptation nor integration is the correct approach. In some cases, a leader will need to decide and “stick by it” – even when the decision is unwelcome or unpopular. During the COVID-19 pandemic, we saw this when business leaders quickly shifted operations, and made difficult decisions to close facilities, lay-off workers, or alter supply chains. In the international leadership context, we see this response used frequently in decisions involving safety standards, codes of conduct, quality standards, fiscal controls, corporate values, and codes of ethics.

During this COVID-19 crisis, we can observe a number of highly effective leaders, setting clear direction, and using their transparency and authenticity to effectively communicate the chosen course of action. These leaders are also acknowledging and communicating the trade-offs necessary to create plans that are responsive to public health concerns and economic imperatives. The ability to use effectively each of the three above responses is a hallmark of good leadership in complex MNEs. The leaders able to navigate the tensions among these three possible responses during the pandemic will likely also be the best MNE leaders going forward.

Insights from the Literature on Virtual International Collaboration

More suddenly and widely than ever experienced before, the COVID-19 crisis has moved collaborative work into the virtual sphere. Large sections of society now find themselves relying exclusively on virtual communication media to complete collaborative tasks. IHRM research teaches us a lot on how managers should support virtual collaborations to facilitate success during the current crisis and beyond. We do not know how long this virtual set-up, spanning the entire world will need to last, but now is a good time for managers to learn from mistakes or at least imperfections in this realm, and to strengthen the quality of virtual work for the future.

The current crisis sheds light on challenges of virtual collaboration that confirm long-standing research insights. For those who had not built strong working relationships before the crisis, working and managing at a distance and through virtual communication media has made it hard to maintain (and even more so to build) strong social ties and networks (Hansen & Lovas, 2004), realistic expectations of reliability (Gibson & Gibbs, 2006) and a team identity (Maznevski, Davison, & Jonsen, 2006), thus impeding a common understanding of norms, goals and tasks as well as effective communication and knowledge sharing (Cramton, 2001; Fulk, Monge, & Hollingshead, 2005). Research on global teams tells us that these challenges are amplified when working internationally in MNEs, where boundaries must be crossed between countries, regions, cultures, institutional contexts, firms, and firm units (see Zimmermann, 2011).

As we know from research in IHRM and other disciplines, virtual work also has potential benefits. It can, for example, attenuate the effects of obvious cultural differences in demeanors, reduce misunderstandings due to verbal language struggles and accents, create electronic trails that document decision making processes, and save on meeting time. Moreover, geographic distance is not always a measure of psychological distance, as virtual team members who communicate frequently and share a professional or personal identity can even feel closer to each other than people collaborating face-to-face (O’Leary, Wilson, & Metiu, 2014).

In the current crisis, managers have an exceptional opportunity to learn, or refine means of mitigating the challenges and realizing the potential of virtual working, which may not have been obvious before, in spite of much past work advocating the benefits of the virtual workplace (Illegems & Verbeke, 2003; Verbeke, Schulz, Greidanus, & Hambley, 2008). One prerequisite is to match the type of information and communications technology (ICT) with the focal task (Malhotra & Majchrzak, 2014). For example, asynchronous virtual communication can be most efficient for information gathering whilst regular face-to-face meetings (or in the current situation videoconferences) should be reserved for tasks such as problem solving and comprehensive decision-making that requires synchronous interactions (Maznevski & Chudoba, 2000).

Managers can further support effective virtual working through each stage of the human resource management process (Zimmermann, 2018). The requirement of working over distances should be included in job advertisement and assessment centers, not just for managers but also for technical staff, to attract and select employees who regard this as part of their professional identity (Zimmermann & Ravishankar, 2011). After recruitment, skills of virtual collaboration can be developed through formal training that covers ICT as well as intercultural knowledge and experiential exercises (Li, Mobley, & Kelly, 2013; Sit, Mak, & Heill, 2017). As mentioned, cross-cultural training is important for those who work virtually across countries, supporting cross-cultural relationship formation and teamworking skills. On the job, new recruits can early on be given the opportunity to work on virtual teams and visit remote offices to develop an awareness of different cultural and organizational contexts that may cause misunderstandings in the virtual collaboration. Rotational assignments and short-term projects abroad serve to enhance the collaboration in global virtual teams by allowing members to develop a better shared understanding of their tasks, goals, and social norms, and to build stronger social ties and a shared team identity (Zimmermann, 2018). For this purpose, the organizational design must allow for the movement of staff in all geographic directions.

Research on virtual collaboration also suggests what measures managers can take to alleviate obstacles to virtual work; to create a more positive work experience for employees; and to increase employees’ motivation to make good on their commitments in the team and the firm. First, managers can facilitate perceived proximity, by allowing employees to communicate frequently and share personal information with remote colleagues, including social media, to help identify personal similarities and to develop stronger relationships (O’Leary et al., 2014). Shared understanding, in turn, must be supported by defining strong shared goals, a clear communication structure, interaction rules, and team member roles (e.g. Earley & Peterson, 2004). To give virtual working skills the attention they deserve, managers should also include employees’ effort in virtual communication and teamwork as criteria for employee performance appraisals. The process of virtual working, not just its outcomes, should thus become relevant for rewards and promotion.

Research on MNE headquarters-subsidiary settings alerts us to additional challenges in managing virtual collaborations. In MNEs, employees at headquarters and subsidiaries often compete for interesting tasks and career prospects. Rather than prioritizing headquarters’ employees, senior MNE managers need to create a ‘combined career pyramid’ which balances the career aspirations of headquarters and subsidiary employees. This will help not only to motivate and commit employees at different locations, but also to break down collaboration barriers. For example, in offshoring settings, distributing widely the more attractive tasks and career paths across sites may help alleviate headquarters employees’ fears of contributing to the ‘offshoring’ of their own jobs. The wide distribution of attractive tasks and career paths will make them more willing to provide support to offshore colleagues, which can in turn reinforce offshore employees’ work motivation and affective and continuance commitment (Zimmermann & Ravishankar, 2016). Importantly, HR and general managers in the different MNE sites need to work together rather than in silos, so to co-design career paths and achieve better virtual collaboration.

In sum, research on virtual collaborations can teach managers much on how to handle the challenges and reap the benefits of collaborating at a distance, which the COVID-19 crisis has brought to the fore. To cope with virtual collaboration on a large-scale during this crisis, managers must develop and reward employees’ virtual collaboration skills, foster perceived proximity, and design ICT, work goals, and the communication structure in a way to foster collaboration. If managers now use the opportunity to take on these insights, they can build their firm’s capability of virtual working for the future. In the long run, virtual collaboration skills will become a more important part of employees’ professional identity. In an international setting, this also implies that managers in different MNE subsidiaries will need to collaborate to design career paths that balance the aspirations of employees at different sites and foster their motivation to work with each other.

Insights from Global Talent Management

The COVID-19 crisis has stretched organizational resources and has accentuated key organizational capabilities. The crisis has exposed ‘holes’ in supposed core competencies, both at the individual and collective levels, but it has also revealed new talents. In our conversations with managers1 we consistently heard the message of some surprising performances, emerging stars, or someone who really showed their new side. These stars are not the usual, more gregarious, employees, but those who tend to be more reserved. This, more introverted group of employees now feels comfortable suggesting new ideas and proposals in the format of virtual meetings (see the benefits of virtual collaboration described in the previous section). The crisis had pushed MNEs to reconsider the key question as to whether they have the right people in the right places. Extant research on Global Talent Management (GTM) has become particularly salient in answering this question. In GTM we have long been arguing the necessity of establishing a differentiated HR architecture for managing talent globally (Minbaeva & Collings, 2013), starting with two key decisions around strategic positions and talent pool.

Strategic positions

The key point of departure is the focus on strategic positions (Becker & Huselid, 2006), especially those organizational roles that can have an above-average impact (Boudreau & Ramstad, 2007). As Minbaeva and Collings (2013) explain, such positions: (1) relate to company strategy and have a direct impact on the effectiveness of strategy implementation; (2) exhibit high variability in the quality of the work completed by the various people occupying these positions; and (3) require unique, firm-specific know-how, tacit knowledge and industry experience that cannot be easily found in the external labor market (see also Evans, Pucik, & Björkman, 2011).

Becker et al. (2009: 51) further explain that the process of identifying strategic positions begins with “the development of a clear statement of the firm’s strategic choice (how will we compete?) as well as the firm’s strategic capabilities (what must we do exceptionally well to win?).” The answers to these questions will be different after the crisis for each MNE. Hence, what are considered strategic positions must be re-evaluated. In doing so, managers may still be guided by the second and third elements listed above (high variability in performance and unique, firm-specific know how), but the first element may need to be reconsidered. In defining strategic positions, now and in the post-Corona crisis, the emphasis needs to shift from a static and reactive strategy implementation role towards a more agile understanding of positions that have a direct impact on how fast the company can change its direction and adapt to new situations.

Notably, the strategic positions will seldom be at the top of the MNE hierarchy. According to Mark Huselid: “the sorting and selection process used to choose senior executives is very extensive. Each step of this process is based on a variance-reduction system in which poor performers are sorted out or developed into good performers. However, at the bottom and middle of the organization, such variability can still exist.”2 Again, the COVID-19 crisis revealed some unexpected and surprisingly key, pivotal positions.

Talent pool

In GTM, the next step entails the creation of a pool of high-potential talents who can occupy the strategically important positions (see for example Björkman, Ehrnrooth, Mäkelä, Smale, & Sumelius, 2013; Collings, Mellahi, & Cascio, 2019). Usually, nomination decisions are made by representatives of MNE subsidiaries or sub-units, and based on a combination of data on individuals’ competencies, past performance, and development potential (Fernandez-Araoz, Roscoe & Aramaki, 2017). In the future, the evaluation of potential should also include cultural agility competences as highlighted above: tolerance for ambiguity, resilience, and curiosity.

In the context of the current crisis, the talent pool is changing, expanding and being reconfigured. Handling the crisis has become an overnight stretch assignment and employees’ response to this stretch assignment has changed many MNEs’ perceptions of their talent pool. With the additional information on how well employees handled the crisis, variance across strategic positions has increased.3 The current situation will test all previous decisions regarding the leadership pipeline and talent management such that, on the other side of the crisis, the high-potential pool may well consist of a different group of employees.

Prior research has shown the potential correlation between personalities and nominations to the talent pool. For example, Caligiuri (2006) has explained how different personality traits (e.g., extroversion) may be favored in global settings. Mellahi and Collings (2010) have argued that social and geographical distances may lead talented employees in foreign MNE subsidiaries to be in “blind spots” because they are less visible. In contrast, talent located at the headquarters may be more visible to – and more valued by – key decision makers in the MNE. The virtual reality imposed by COVID-19 has had a levelling effect. Introverts have been given an equal chance to participate in the virtual interactions and discussions. Everyone, regardless of location, has had equal access to decision-makers in virtual meetings, and has had an equal opportunity to contribute. The work reality fostered by the COVID-19 pandemic has helped to supersede structural, geographic, and social barriers that previously limited talent management decisions.

In sum, the insights from GTM are especially relevant for companies during the crisis period, and they will be even more relevant in the next stage – the Restart.4 The crisis has redefined not just where we work but has altered the work we do and how we do it.5 To succeed in the next ‘new normal’, MNE senior managers will need to revisit the prevailing definition of talent and their understanding how economic value is created.

Implications for IHRM research: looking beyond the pandemic

In the first part of this Editorial, we have drawn attention to several key insights from IHRM scholarship that provide the foundation for understanding, interpreting, and addressing COVID-19 related workplace challenges. The insights we have outlined could serve to guide senior MNE managers in HRM and beyond as they address novel, people-related challenges in their organizations. However, the pandemic has also highlighted some gaps in our research: answers to questions we wish we had in the academic literature but, to date, do not.

This section of our Editorial turns to recommendations for future IHRM scholarship in the post-pandemic reality. We think that novel and multidisciplinary research will be needed to address the context, processes, and outcomes of work post-pandemic. Below we focus especially on suggestions for research on: (1) how to manage with global uncertainty; (2) how to facilitate global work; and (3) how to redefine organizational performance.

Managing with Global Uncertainty

The concept of volatile, uncertain, complex, and ambiguous (VUCA) environments has been recognized for some time (Schoemaker, Heaton, & Teece, 2018; Van Tulder, Verbeke, & Jankowska, 2019), yet the health and economic crises resulting from COVID-19 have given the concept further significance. The COVID-19 pandemic has revealed extraordinary vulnerabilities arising from widespread global uncertainty. Uncertainty is no longer the context experienced by just senior MNE leaders involved in managing complex global supply chains, volatile financial markets, and unpredictable geopolitical relationships. Rather, uncertainty has become the context for numerous MNE employees who are working from home for the first time, experiencing job instability and financial insecurity, and worrying about their and their loved ones’ health and safety.

The context, as we know in IHRM, sets an important boundary condition in understanding the efficacy of our theories (e.g., Brewster, Mayrhofer & Smale, 2016; Cooke, 2018; Cooke, Wood, Wang, & Veen, 2020) and this context of uncertainty, which has been exacerbated by the COVID-19 pandemic, cannot be ignored. Our view is that IHRM should explore new avenues of managing global uncertainty and that it can thereby contribute to answering some of the ‘big questions’ in IB (Buckley et al., 2017). While the context of uncertainty has created opportunities for many streams of IB research, we would like to focus on three key ones: leadership and talent management, collaborating under stress, and managing health and safety.

Leadership and talent management

The United States War College was the first institution to coin the term VUCA. For decades, military institutions globally have been developing leaders who could lead through a VUCA reality. Partnering with scholars from the military, future research in IB could advance how leadership styles and behaviors might need to vary during situations of high uncertainty, and how specific interventions might lead to vastly improved outcomes (Adler, Bliese, McGurk, Hoge, & Castro, 2009). This could be especially important when the high uncertainty context creates an emotional fear response, as we saw with some employees who were forced to work without adequate protective equipment during the COVID-19 pandemic. If employees are sensing true fear, a leader’s role would be to help employees process the context, allowing the rational response to supplant the emotional response. Universally effective leadership skills might be in play during fear-inducing situations. However, given that both Geert Hofstede and the GLOBE study identified “uncertainty avoidance” as a primary cultural difference, culturally bound leadership styles might be warranted for situations of high uncertainty and fear. Future research should examine this further.

In the case of the COVID-19 pandemic, members on a global team might be experiencing the same tangible level of uncertainty but might have vastly different reactions. Just as uncertainty might be experienced differently across cultures, so might the responses to fear, stress, and anxiety. Thus, future research should examine whether global leaders are able to identify (and respond effectively) across cultures. For example, the same leadership communication to address employees’ uncertainty might have differentially effective responses, depending on their cross-cultural context. IB scholars could partner with scholars in neuroscience to understand differences in cross-cultural emotional responses and how to recognize and address these in an international business context.

The ever-growing global uncertainty shapes assumptions beyond talent management, especially with respect to the choice of selection and performance criteria for an MNE’s talent pool. Despite recent advances in recognizing the importance of context (Vaiman, Sparrow, Schuler & Collings, 2018), the GTM research assumes that what makes talent a talent is universal across cultures and homogeneous for all MNE units. Contrary to this, Morris, Snell, & Björkman (2016) identified four types of human capital underlying the talent portfolio of MNEs and explained that different configurations of the talent portfolio tend to be emphasized in different contexts. Future research should examine whether different configurations of the talent portfolio should be emphasized in the context of global uncertainty, and whether different types of human capital could contribute differently to organizational resilience (see next section). In addition, as Minbaeva (2016) points out, what constitutes ‘talent’ in the fluid context of emerging economies and developing countries differs significantly from the definition of ‘talent’ in the (comparatively) stable environment of developed economies. Following the traditions of extreme context research (Hällgren, Rouleau & de Rond, 2018), GTM research needs to revisit its assumption that internal MNE talent systems function in a globally uniform way, using a single, standardized understanding of what good performance and high potential entail.

Collaborating under stress

The COVID-19 pandemic is a globally shared stress-producing experience which can, according to social psychology, foster a natural desire to connect with others (Gump & Kulik, 1997; Sarnoff & Zimbardo, 1961; Schachter, 1959). Future research should examine whether collaborating through the COVID-19 pandemic has strengthened relationships among colleagues from different cultures or, had the opposite effect, by creating a greater emotional distance because the ability to support one another was limited to virtual interactions filtered through diverse cultural lenses. Delineating the circumstances under which fear facilitates cohesion (or division) among culturally diverse colleagues would be important for generating interventions.

IHRM has long understood that certain competencies affect success when working under stress in different countries and with people from different cultures (Shaffer et al., 2006). Future research should examine the extent to which this new way of collaborating under stress in a context of uncertainty will require additional competencies. In addition to competencies, future research should examine whether employees’ experiences have better prepared them to succeed during the COVID-19 pandemic. It might be the case that employees who have lived and worked abroad would be better able to collaborate effectively in a high-uncertainty environment.

Health and safety

The COVID-19 pandemic has shown that managing employees’ health and safety is a key challenge for IHRM, and this is an important component of the grand challenge faced by MNEs in understanding how to deal with social responsibility (Buckley et al., 2017). However, IHRM scholars (and practitioners) are unlikely to command the entire reservoir of requisite knowledge to investigate all the mental, physiological, and even physical problems that employees may experience during and after the pandemic. As for other complex challenges, our understanding of health and safety issues would benefit greatly from multidisciplinary collaboration, particularly with scholars in fields such as health. For example, we could apply health-based knowledge about the long-term health consequences of risk exposure, to investigate the long-term consequences of travel bans and stay at home orders on employees’ mental health. IHRM scholars must also broaden their scope of attention. To date, IHRM scholars have largely focused on a narrow range of sub-clinical aspects of psychological well-being and adjustment. Yet, the extreme situation of the pandemic challenges us to support managers who are dealing with health matters that include serious outcomes among employees, including depression, substance abuse, or suicidal ideation, which are already well understood by health scholars. Future research should also give more attention to the positive aspects of global work. While most IHRM research has focused on global work as a context with negative consequences for health and safety, future research could investigate antecedents in global work that lead to positive outcomes such as thriving and resilience (Ren et al., 2015).

Facilitating Global Work

The COVID-19 pandemic has amplified new ways that global work can be accomplished, encouraging us to rethink how MNEs use global teams and virtual collaboration and international assignments.

Global teams and virtual collaboration

For IHRM, the COVID-19 pandemic has highlighted the importance of how employees can work effectively across borders while remaining at home. The focus on global teams has become particularly salient. With employees sharing the same global stressor, future studies should examine whether their experience of getting through it together has fostered greater cohesion and, if so, whether those MNEs that have spent time to train their employees on cross-cultural virtual collaboration now have global teams with greater expectations of reliability among the members. Working from home has exposed employees’ full selves as conference calls are bringing colleagues into each other’s homes, possibly seeing each other’s pets, children, and home décor. Future studies should examine whether the COVID-19 pandemic has fostered greater global virtual team cohesion by providing visible evidence of each other’s true selves.

The crisis also offers a new opportunity to look at the fundamentals of virtual collaboration. IHRM researchers could use the current situation of large-scale virtual working as an ‘extreme case scenario’ to examine the extent to which virtual collaboration can be effective. They could ask whether the methods that we have derived from virtual collaborations amongst managers or technical experts (e.g., information systems engineers) suffice for achieving effective work in the types of collaborations that were previously not virtual, for example among administration staff inside the MNE.

Future research should thus use the current context of the COVID-19 pandemic to study those who are working from home for the first time. This group would uniquely enable us to examine the cross-national, generational, functional, etc. differences in predicting employees’ preferences for working from home in the future, post-pandemic. For example, are relationship-oriented or collectivist cultures more likely to want to return to the workplace? IHRM researchers can also use the extreme case scenario to study the pitfalls and levers of large-scale virtual conferences that have now been held for the first time. Whilst this type of research may bring to the surface new psychological and practical barriers to virtual collaboration, which set its boundaries, it also promises to show how virtual collaboration can be expanded both in scale and scope – to different types of work and forms of collaboration.

So far, insights into virtual collaboration have been gained in different academic disciplines that have largely operated as silos. Besides IHRM and IB, important findings on international or global virtual collaboration stem from the areas of information systems (IS) – which has studied dispersed IS collaborations for a long time – organizational studies, and strategic management. The last two areas have highlighted the role of the organizational and strategic contexts respectively. IHRM researchers, therefore, need to draw on insights from these disciplines to achieve a better understanding of virtual collaboration and practices in order to optimally support these.

International assignments

With countries’ borders closed for fear of the COVID-19 virus spreading further, the idea of an upward trajectory of international assignments seems highly unlikely. Assuming that fewer employees will be sent abroad to live and work in the context of international assignments, future research will need to investigate alternative control MNE mechanisms for subsidiaries, alternatives for developing future global leaders, and alternatives for addressing skill shortages in host countries. For example, could technology-driven control mechanisms successfully replace an expatriate leader sent from headquarters to oversee operations? Could domestic-based experiences in culturally diverse settings also foster cultural agility competencies the way a high-quality international assignment would? Could skills be taught to host country nationals through virtually means, so as to prepare them for anticipated skill shortages in host countries? With fewer expatriates living abroad, those who are sent abroad will need to achieve greater success faster than previous generations of expatriates did because the stakes, so to speak, will be higher. Speed of adjustment for those expatriates who are still going abroad will be of utmost importance.

The expatriate literature has evolved to understand cross-cultural adjustment as an idiosyncratic person–environment relationship based on how people uniquely experience living abroad (Haslberger, Brewster, & Hippler, 2013; Hippler, Caligiuri & Johnson, 2014). Various facets of the host country environment – when compared to the home country – are individually determined for their influence on an individual’s level of adjustment. For some, the change might be better or worse – or having no real effect. Future research should mirror the approach in the expatriate adjustment literature to determine who is best able to adjust to the various facets of this novel work environment and to what extent the support practices offered have fostered employee adjustment to various facets of work-life during these uncertain times. For example, some employees might have adjusted well to working from home – even preferred it. Others might adjust to working from home only after employer support practices were implemented, such as regular team meetings or training on how to work virtually. The experience of working from home during the pandemic could open new opportunities for IHRM research to examine flexible work arrangements for expatriates. While the IHRM literature has begun to examine flexible work arrangements in the context of global teams (Adamovic, 2018), there has been little attention to date to the FWAs used in other types of international work.

Rethinking how MNEs use global teams and virtual collaboration and international assignments, could constitute important elements in a reconfiguration of the IHRM function. There is an opportunity for IHRM research to collect relevant and useful evidence to facilitate global work in the future, by examining the role of the IHRM function during and after the crisis. Even large organizations with sophisticated pre-pandemic IHRM policies are likely to be re-writing the rules. For example, as travel restrictions ease, employers and individuals will make decisions about whether, when, and where they feel safe to travel. IHRM scholarship can offer an evidence-base for global mobility policies that will help employees to adjust to new ways of working in teams and the inevitable stress and uncertainty of post-pandemic travel.

Redefining Performance

Minbaeva and De Cieri (2015) wrote about the need for IHRM scholars to rethink their key dependent variable – organizational performance. They referred to enterprise resilience – the ability of an enterprise to respond or “bounce back” from shock events (e.g., Branzei & Abdelnour, 2010; De Cieri & Dowling, 2012) – as an important outcome variable for IHRM in the context of large-scale disasters. The COVID-19 crisis adds to the long list of shock events in the twenty-first century that have included terrorism, corporate scandals, the global financial crisis that began in 2007, natural disasters (e.g., the Indian Ocean tsunami in 2004; the Icelandic volcano eruption in 2010), and environmental disasters (e.g., the BP/Deepwater Horizon oil rig explosion off the US’s Gulf Coast) (Minbaeva & De Cieri, 2015). The global pandemic once again stresses the importance of understanding the role of IHRM in building enterprise resilience.

The crisis also brings home the point that sustainability, and more specifically organizations’ contributions to the United Nation’s sustainable development goals (SDGs), should become a dependent variable in IHRM research. The UN’s 17 SDGs, adopted as a non-binding agreement in 2015 by 193 countries, are relevant not only to governments but also to all stakeholders in employment relationships (Fowler & Biekart, 2017; Sachs, 2015; UN General Assembly, 2015). These goals are part of the ‘big picture’ of global development, with environmental, humanitarian and economic implications. HRM scholars have been criticized for being slow to respond to these goals (Alzola, 2018).

As is the case with other environmental disasters today, the COVID-19 crisis has been directly linked to the unsustainable ways in which humans treat the world’s ecosystem (The Guardian, 2020; WWF, 2020). When seen through this (albeit debatable) lens, the COVID-19 crisis should alert us to the need to rethink our working practices to help address environmental sustainability. Unintentionally, IHRM research may in the past have contributed to environmentally unsustainable working practices, e.g., by promoting frequent international travel in instances where such travel could have been easily avoided and replaced by more environment-friendly modes of professional interaction. The current crisis now provides an opportunity for IHRM researchers to guide MNEs towards contributing to achieving the SDGs. They could do this especially by examining how virtual working can be optimized to reduce the extent of commuting and travel. In addition to examining the sustainability of global HR policy and practice, future research could address the SDGs with respect to global health and safety, e.g., by examining how global mobility practices integrate health and safety matters. Specific areas where the IHRM function could demonstrate its relevance might include management of risk exposure in MNE subsidiary locations and travel destinations, anticipative management of emergencies such as medical evacuations, and the reduction of work-related injuries and illnesses.

In the above exposé, we have outlined how IHRM researchers should use the current extreme scenario of virtual working to scrutinize the boundaries of effective virtual collaboration and find means to support it at a broader scale (without compromising on organizational effectiveness or employees’ mental health). During the ‘lockdown’, people have experienced improvements in air quality, noise levels and congestion, and have at the same time tested and practiced their virtual collaboration skills. Through this, many of us may have become more open to the idea of reducing unnecessary travel, which at a larger scale contributes to reducing the environmental destruction that has fed into the crisis itself. Even if unexpected barriers to virtual working surface, IHRM researchers may be more inclined than before to search for new avenues to capitalize on virtual working and to foster sustainable management practices in this realm.

Recognizing that much of the IHRM literature has focused on high-status professional employees, future research should give attention to the MNE’s entire workforce and beyond in the context of its CSR strategy, to address the needs of individuals for whom the pandemic has exacerbated conditions of insecurity, disempowerment and vulnerability. This is particularly important given that the SDGs highlight the eradication of extreme poverty and hunger, and reduction of inequality, which are issues that will be exacerbated as we enter a likely post-pandemic global recession. IB needs to better understand the role of globalization from the perspective of job creation and job loss globally. Buckley et al. (2017) have identified the potential for IB scholars to collaborate with scholars in disciplines such as health economics and epidemiology to address grand challenges such as the impact of “poverty and child mortality, on local employees and subsidiaries” (p. 1055). We suggest that IHRM scholars have both a responsibility to join these conversations and an opportunity to contribute their insights about people in the global workforce.

Table 1 presents a summary of our suggestions for future IHRM scholarship, informed by our extant knowledge base, our direct learnings from responses to the pandemic and new questions raised by the pandemic as we enter into the post-pandemic ‘next normal’.

Table 1 Recommendations for Future IHRM Research

Conclusion

Buckley et al. (2017) have pointed out that a “narrow scope of research has potentially hindered IB scholars from studying more impactful research questions” (p. 1048). The same can be said of IHRM. Despite the intrinsic multi-disciplinary nature of the topics in which IHRM scholars are interested, there has been little cross-pollination of ideas and knowledge across disciplines (Andersson et al., 2019). The experience of the COVID-19 crisis has showed again that useful knowledge of IHRM, which could inform and support management practice, remains dispersed and fragmented. There are many reasons for this, yet we cannot answer the ‘big questions’ unless we share knowledge and collaborate in multidisciplinary research.

This Editorial has hopefully demonstrated that the most useful knowledge for management practice is derived from IHRM research with the following features: multidisciplinary in nature, multi-stakeholder oriented, multilevel, and methodologically pluralist. This is what the future of IHRM should look like, for it to perform a valuable role in IB scholarship (Buckley et al., 2017). The COVID-19 crisis, as a global shock, illustrates once again that IHRM researchers have an opportunity – but also the shared responsibility – to make a difference. They can do so by providing inspired responses, grounded in state-of-the-art scholarly work, to the grand challenges of our time.

Notes

  1. 1

    https://www.linkedin.com/groups/8928700/.

  2. 2

    Professor Mark Huselid (D’Amore-McKim School of Business, Northeastern University, USA). Presentation at the mini-conference on “Human Capital Analytics”, Copenhagen Business School, October 2016.

  3. 3

    As one senior executive explained: “Some 5 s become 9 s, but other 5 s failed to 3 s” (the company is using the performance scale ranging from 1 (min) to 10 (max)).

  4. 4

    https://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/the-restart?cid=other-eml-alt-mip-mck&hlkid=17bde39d07df446db8ee005b1edb0404&hctky=9992611&hdpid=d7377876-06d5-4721-83eb-57e9fccaebf4.

  5. 5

    https://hbr.org/2020/04/how-the-coronavirus-crisis-is-redefining-jobs.

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Caligiuri, P., De Cieri, H., Minbaeva, D. et al. International HRM insights for navigating the COVID-19 pandemic: Implications for future research and practice. J Int Bus Stud 51, 697–713 (2020). https://doi.org/10.1057/s41267-020-00335-9

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